fy 2016 results - procredit holding€¦ · march 2017 14 stable during fy 2016, however, below the...

FY 2016 resultsFrankfurt am Main, 29th March 2017 (updated as of 03.05.2017)

Borislav Kostadinov, Member of the Management BoardJana Donath, Manager Finance and Controlling

► A profitable, development-oriented commercial banking group for SMEs with focus on South Eastern Europe and Eastern Europe

► Internationally established group of development-oriented banks for SMEs

► Headquartered in Frankfurt and supervised by the German Federal Financial Supervisory Authority (BaFin) and Deutsche Bundesbank

► Mission of promoting sustainable development with ethical corporate culture and long-term business relationships

► Track record of high quality loan portfolio

► Profitable every year since creation as a banking group in 2003

2

Notes: As of 31 December 2016; (1) Continuing operations only; 4,751 employees in total; (2) Customer deposits divided by gross loan portfolio; (3) Shareholders of the general partner entity (does not include ProCredit Staff Invest 3 GmbH & Co. KG); (4) Aggregate of different investment entities, each with a shareholding below 3%

Reputable development-oriented shareholder base

Key figures FY 2016

Geographical distribution

Summary

ProCredit – A unique approach to banking

Germany(ca. 2% of gross loan portfolio)

South Eastern Europe and Eastern Europe (ca. 90% of gross loan portfolio)

South America(ca. 8% of gross loan portfolio)

Discontinued operations

Investors with shareholdings >3% to <5% Core shareholders: 61% shareholding(2)

Omidyar-Tufts Zeitinger Invest, KfW, DOEN, IFC, ProCredit Staff Invest

(3)

Note: Shareholder structure as of 21 December 2016

ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017

Total assets

EUR 5,668m

Gross loan portfolio(1)

EUR 3,629m

Deposits/loans(2)

96%

Number of employees(1)

4,078

Net income

EUR 61m

RoAE

9.6%

CET1 ratio (fully loaded)

12.4%

Rating (Fitch)

BBB (stable)

Agenda

3

B

A

C

Highlights

Financial development

Asset quality


D Balance sheet, capital and funding

Q&A

Appendix

11,514

4,078

Dec-13 Dec-16Number of employees

Where do we come from?Significant progress since 2013

4ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017

Focused growth in SME loan categories

Regional focus on South Eastern Europe and Eastern Europe

Decrease in overall branch network

Decrease in number of cash desk transactions

Decrease in number of employees(2)

Increase in loan portfolio per employee

58%81%

Dec-13 Dec-16Loan portfolio > EUR 30k in % total loan portfolio

71%89%

Dec-13 Dec-16

SEE and EE as % of gross loan portfolio

317 67

328

224

Dec-13 Dec-16Number of branches Number of service points

645291

363

890

Dec-13 Dec-16Gross loan portfolio per employee

(in E

UR

k)

(1)

Note: (1) Loan portfolio > EUR 30k initial loan size in % total loan portfolio by outstanding principal (2) 4,078 referring to continuing operations

28%

5%

Dec-13 Dec-16Cash desk transactions in % total transactions

Recent key achievements


Execution of business strategy► Strong growth with target SME clients (+13%)► Implementation of modern 24/7 zones at majority of outlets► Successful capital increase of EUR 31.9m to support attractive growth opportunities

Continued external recognition and certification► Confirmation of BBB rating by Fitch► Corporate Responsibility Prime rating by oekom research► EU Eco-Management and Audit Scheme (EMAS) certification for ProCredit‘s Germany-based institutions

Execution of regional strategy► Opening of branch in Thessaloniki, Greece► Opening of new training hub in Kosovo► Closing of sales of Banco PyME Los Andes ProCredit S.A. in Bolivia and of ProConfianza Mexico

Transformation into a publicly listed company► Listing of ProCredit Holding in the Prime Standard of the Frankfurt Stock Exchange► First initiation of research coverage on ProCredit share (PCZ)

Strong loan volume growth in target loan categories

6ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017Note: Loan volume growth split by initial loan size in all segments

(in E

UR

m)

Reconciliation of FY 2016 net profit


Decreased net interest income due to run-off of loan portfolio< EUR 30k and decreased NIM largely compensated bysignificantly reduced cost of risk: 0.5% of gross loan portfolio, down from 1.2% in FY2015

Strong decrease of costbase driven by bothreduction of personnel andadmin expenses

EUR 14m profits from discontinuedoperations in 2016 compared toEUR 23m in 2015; partly due to the sale ofsubsidiaries in Congo and Armenia in 2015

+23% (EUR 8.7m) -39% (EUR 9.0m)

(in E

UR

m)

Segmental contribution to group net income


Group functions such as e.g. risk, reporting, capital and liquidity management, training development

Includes ProCredit Holding, Quipu, ProCredit Academy Fürth, ProCredit Germany (EUR 78m loan portfolio; EUR 114m customer deposits)

Profit after tax of EUR 14.0m, split into profitcontributions from entities in El Salvador, Nicaragua, Bolivia and Mexico ofEUR 10.1m and EUR 3.9m net gain on saleof entities in Bolivia and Mexico

Gross loan portfolio (EUR bn) 2.5 0.7 0.3 – 3.6 0.4 4.0

2016 loan growth >€30k +12.5% +17.7% +13.2% – +13.0% – –

PAR 30 ratio 3.8% 3.3% 7.5% – 3.9% – –

Cost income ratio 61.5% 47.0% 112.2% – 71.3% – –

RoAE 12.3% 17.5% -3.5% – 8.8% – 9.6%

-2.3

Outlook for ProCredit Group 2017


► Growth of the total gross loan portfolio 5 – 8%

► Return on average equity (RoAE) 7 – 9%

► CET1 ratio (fully loaded) > 13%

► Dividend payout ratio 1/3 of profits

In the mid-term, and taking into consideration a stabilising political, economic and operating environment, we see potential for

c. 10% p.a. growth of the gross loan portfolio, a cost income ratio (CIR) < 60%, and a return on average equity (RoAE) of c. 10%

► Growth of the gross loan portfolio in the target loan categories (>EUR 30,000) c. 10%

Agenda

10

B

A

C

Highlights


Asset quality



Q&A

Appendix

(in EUR m) FY 2015 FY 2016 y-o-y

Net interest income 260.7 230.8 -11%

Provision expenses 42.1 18.6 -56%

Net fee and commission income 47.7 43.0 -10%

Net result of other operating income -1.4 4.2 n.m.

Operating income 265.0 259.3 -2%

Operating expenses 211.4 198.2 -6%

Operating result 53.5 61.1 14%

Tax expenses 15.2 14.1 -7%

Profit from continuing operations 38.4 47.0 23%

Profit from discontinued operations 23.0 14.0 -39%

Profit of the period 61.3 61.0 -1%

Change in loan portfolio > EUR 30,000 18.3% 13.0% -5.4%pp

Return on average equity 10.5% 9.6% -0.9%pp

CET 1 ratio (fully loaded) 10.1% 12.4% +2.3%pp

Net interest margin 5.5% 4.6% -0.9%pp

Net write-off ratio 0.8% 0.7% -0.0%pp

% of loans in PAR 30 4.4% 3.9% -0.5%pp

% of impaired loans 7.4% 6.3% -1.1%pp

Cost-income ratio 68.9% 71.3% +2.5%pp

Book value per share 11.73 12.07 +3%

Dividend payout ratio 33% n.a. n.a.

Additional indicators

Income statement

Key performance indicators

FY 2016 results at a glance

11ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017Note: P&L related figures and ratios relate to continuing operations only; i.e. excluding Bolivia, Mexico, El Salvador and Nicaragua for 2016 and 2015

Net interest income


► Decreased net interest income yoy impacted mainly by the strategic decline of the loan portfolio with loan sizes< EUR 30k (-28% yoy)

► Decline in interest income partly compensated bydecrease in interest expenses; mainly from increasedshare of deposits from current and savings accounts

► Decline in share of high interest loans as part ofstrategic run-off of the loan portfolio < EUR 30k loansize, however, with significant positive effects on bothrisk costs and operating costs

► Lower market interest margins in 2016

66.6

60.758.2 56.7 55.3

5.5%

5.0%4.8%

4.6%4.4%

Q4-15 Q1-16 Q2-16 Q3-16 Q4-16

Net interest income Net interest margin

(in E

UR

m)

(in E

UR m

)

Provisioning expenses


► Further declined allowances for losses on loans and advances to customers

► Down to EUR 18.6m in FY 2016 from EUR 42.1m in FY 2015

► Loan loss provisions ratio further down to 0.5% in FY 2016 from 1.1% in FY 2015, partly driven by strategicportfolio shift

Notes: (1) Cost of risk defined as allowances for losses on loans and advances to customers, divided by average gross loan portfolio

(1)

13.0

9.4

4.5

2.9

1.8

148 bps

107 bps

51 bps

33 bps

20 bps

Q4-15 Q1-16 Q2-16 Q3-16 Q4-16

Allowance for losses on loans and advances to customers

Cost of risk

(in E

UR

m)

(in E

UR m

)

Net fee and commission income


► Stable during FY 2016, however, below the levels in FY 2015

► Down to EUR 43.0m in FY 2016 compared to EUR47.7m in FY 2015, mainly as a result of a decrease in income from cash transactions

► Significant increase of net fee and commission income per client in 2016 compared to 2015

► ProCredit has significantly reduced the number of cash transactions which has a positive impact on personnel and administrative costs

13.8

10.7 10.910.4

10.9

Q4-15 Q1-16 Q2-16 Q3-16 Q4-16

Net fee and commission income

(in E

UR

m)

(in E

UR m

)

Operating expenses


► Decrease in operating expenses by 6.3% during FY 2016 (EUR 198m in FY 2016 compared to EUR 211m in FY 2015)

► Decline in cost base influenced by

► Decreased number of staff (down by 12.5% to 4,078 as of Dec-16 compared to 4,659 as of Dec-15; in addition, sale of entities in Bolivia and Mexico)

► Decreased administrative expenses, mainly due toreduced and modernized branch network

► General decline in cost base partly compensated by

► Increased average salaries (+6% yoy)

► Increased IT investments

► One-off costs in Q4-16, also in relation to the Listing ofProCredit Holding at the Frankfurt Stock Exchange

30.6

25.427.1 25.8

31.7

23.0

21.822.1 22.1

22.1

53.6

47.349.2 48.0

53.8

71.7% 69.7% 68.6% 68.9%78.1%

Q4-15 Q1-16 Q2-16 Q3-16 Q4-16

Personnel expensesGeneral and administrative expenses (incl. depreciation)Cost income ratio

(in E

UR

m)

(in E

UR m

)

Agenda

16

B

A

C

Highlights


Asset quality



Q&A

Appendix

Structure of the loan portfolio


Loan portfolio by geographical segments

Notes: Loan portfolio by geographical segments and by sector in % of total gross loan portfolio (EUR 3,629m as per 31-Dec-16)

Loan portfolio by sector

Structure of the loan portfolio (continued)


Loan portfolio by initial loan size

Notes: Loan portfolio by initial loan size in % of total outstanding principal (EUR 3,604m as per 31-Dec-16); loan portfolio by currency in % of total gross loan portfolio (EUR 3,629m as per 31-Dec-16)

Loan portfolio by currency

Loan portfolio quality


► Net write-offs at continuously low level

► Low portfolio at risk, lower compared to Dec-15 mainly due to the changed structure of the loan portfolio

► Prudent risk management underlined byhigh coverage ratios

► Continuous monitoring of loan portfolio, with PAR 90, PAR 30, and impaired loans as key reporting triggers

► Very conservative definition of impairedloans, including PAR30

58%

32%

3.6% 3.4%

0.8%0.6%

3.0%

2.4%

Dec-15 Dec-16

PAR 90+ days PAR 30-90 days Other signs of impairment

Impairedloans

PAR 30

PAR 90

7.4%

4.4%

3.6%

6.3%

3.9%

3.4%

0.8%

66%

0.7%Net write-offs(1)

Coverage ratioimpaired(2)

Notes: (1) Net write-offs to gross loan portfolio ratio (2) Allowances for losses on loans and advances to customers divided by impaired loan portfolio

97% 106%Coverage ratioPAR30(3)

72.6%

1.3%2.0%

24.1%

Mortgages Cash collateral Financial guarantees Other

Structure of collateral


► Total collateral of EUR 2.8bn; of which majority as mortgages (73% as per Dec-16)

► Clear and strict requirements regarding types of acceptable collateral, legal aspects of collateral and insurance of collateral items

► Standardised collateral valuation methodology

► Regular monitoring of the value of all collateral and a clear process of collateral revaluation, also by usage of external, independent experts

► Verification of external appraisals and regular monitoring activities carried out by specialist staff members

Collateral by type (Dec-16)

Total: EUR 2.8bn

Development of green loan portfolio


►Strong growth of the green loan portfolio (38% p.a. over thelast three years)

► Includes credit products for investments in

►Energy efficiency

►Renewable energies

►Other environmentally-related activities

►Ambition of min. 10% of the total loan portfolio (currently at 9.1%)

►Currently 7,772 outstanding credit exposures

►Largest part of green loan portfolio to finance energy efficiency measures (70.2%)

►Very high portfolio quality; PAR 30 ratio for the portfolio below 0.5%

Overview of growth in last three years

Structure of green loan portfolio (Dec-16)

Total: EUR 329m

3.0% 4.0% 6.4% 9.1%

104 150242

30722

23

2122

126174

264329

Dec-13 Dec-14 Dec-15 Dec-16Business clients Private clients % of total loan portfolio

Agenda

22

B

A

C

Highlights


Asset quality



Q&A

Appendix

(in E

UR m

)

Asset reconciliation


Net loans tocustomers

Cash and cash equivalents

Assets heldfor sale

Other assets

Classification of entity in Bolivia asdiscontinued operation in Q3-16; subsequent sale of entityin Q4-16 (associated decline of groupnet loan portfolio of EUR 568m)

Sale of entity in Mexico; remaining entities held forsale: ProCredit banks in El Salvador and Nicaragua

(in E

UR m

)Liabilities and equity reconciliation


Equity

Subordinated debt

Liabilities tocustomers

Liabilities relatedto assets held forsale

Liabilities tobanks

Debt securities Liabilities to IFIs

Increase in current accounts (+EUR 263m) andsavings accounts (+EUR 110m), offset bydecrease in term deposit accounts (-EUR 691m)

EUR 31.9m capital increase in Nov-16, EUR 41.1m retained earnings,-EUR18.4m increase of translation reserve

12%

6%3%3%9%

61%

6%

Liquidity update


► Comfortable liquidity situation

► LCR at Group level at 194% as of 31-Dec-16, significantly above regulatory requirement

► Highly liquid assets of EUR 1.1bn; decrease yoy due to overall decrease in balance sheet

► HLA ratio of 32%

Liquidity coverage ratio

Highly liquid assets (HLA) and HLA ratio

174%194%

60% 70%

Dec-15 Dec-16

LCR ratio Regulatory minimum

1.2 1.1

Dec-15 Dec-16

Highly liquid assets (< 1 month) HLA ratio

(in E

UR

bn)

31% 32%

75% 75%

10%10%

15%15%

Dec-15 Dec-16

Credit risk Market risk (currency risk) Operational risk

4,603

5,258

Regulatory capital and RWA

26

Overview of capitalisation


Development of RWA by category

Total RWAin EUR m

► Comfortable capital position regarding CET1 capital ratio, Total Capital ratio and Leverage ratio

► Tier 1 capital currently consisting of CET1 capital only

► RWA mainly comprise credit risk (75% of total RWA)

► RWA decreased by 12.5% in 2016, primarily as result ofdecreased asset base following the sale anddeconsolidation of Banco Pyme Los Andes ProCreditBolivia

(12.5)%

(in EUR m) Dec-15 Dec-16

CET1 capital (net of deductions) 535 574

Additional Tier 1 capital (net of deductions) 0 0

Tier 1 capital 535 574

Tier 2 capital 103 150

Total capital 639 724

RWA total 5,258 4,603

o/w Credit risk 3,950 3,446

o/w Market risk (currency risk) 505 462

o/w Operational risk 801 694

o/w CVA risk 2 1

CET1 capital ratio 10.2% 12.5%

Total capital ratio 12.1% 15.7%

Leverage ratio 8.6% 9.9%

CET1 capital ratio (fully loaded) 10.1% 12.4%

Total capital ratio (fully loaded) 11.7% 15.4%

Leverage ratio (fully loaded) 8.6% 9.8%

Development of CET1 capital ratio (fully loaded)

27

Development of CET 1 ratio (fully loaded) in 2016


+1.3%pp related to sale of Banco Pyme Los Andes ProCredit Bolivia, remainderrelated to sale of ProConfianza Mexico

Recognition of profitsQ4-15, Q1-16, Q2-16, Q3-16

EUR 31.9m capital increasein Nov-16 by existingshareholders

Leverage ratio (fully loaded) 9.8%

Agenda

28

B

A

C

Highlights


Asset quality



Q&A

Appendix

Q&A


Agenda

30

B

A

C

Highlights


Asset quality



Q&A

Appendix

Overview of quarterly financial development


Notes: (1) Annualized

(in EUR m) Q4-15 Q1-16 Q2-16 Q3-16 Q4-16

Net interest income 66.6 60.7 58.2 56.7 55.3

Provision expenses 13.0 9.4 4.5 2.9 1.8

Net fee and commission income 13.8 10.7 10.9 10.4 10.9

Net result of other operating income -5.7 -0.8 -0.1 2.4 2.6

Operating income 61.7 61.2 64.5 66.7 67.0

Operating expenses 53.6 47.3 49.2 48.0 53.8

Operating result 8.1 13.9 15.2 18.7 13.2

Tax expenses 3.2 3.9 3.4 3.9 2.9

Profit from continuing operations 4.9 10.0 11.8 14.9 10.4

Profit from discontinued operations 1.0 1.1 6.5 -8.6 15.1

Profit of the period 5.9 11.0 18.3 6.2 25.5

Change in loan portfolio > EUR 30,000 4.2% 0.6% 5.2% 1.8% 4.8%

Return on average equity(1) 4.1% 7.1% 12.0% 3.9% 16.1%

CET 1 ratio (fully loaded) 10.1% 10.3% 10.3% 10.6% 12.4%

Net interest margin(1) 5.5% 5.0% 4.8% 4.6% 4.4%

Net write-off ratio(1) 0.8% 0.5% 0.2% 0.4% 0.7%

% of loans in PAR 30 4.9% 5.4% 4.9% 4.7% 3.9%

% of impaired loans 7.4% 7.8% 7.3% 7.7% 6.3%

Cost-income ratio 71.7% 67.0% 71.4% 68.9% 78.1%

Income statement

Key performance indicators

Additional indicators

Strong loan volume growth in target loan categories South Eastern Europe and Eastern Europe


EUR 173 m EUR 395 mRemaining

stock

-27% (EUR 214m) +3%FY 2016

Note: Loan volume growth split by initial loan size in segments South Eastern Europe and Eastern Europe

(in E

UR

m)

Initial loan size

(in EUR k)

-19% (EUR 181m) +6%FY 2015

(in E

UR

m)

Initial loan size

(in EUR k)

+14% (EUR 321m)

+18% (EUR 348m)

27% 20%

73% 80%

2,443 2,521

Dec-15 Dec-16

Loan portfolio < EUR 30k Loan portfolio > EUR 30k

(inE

UR

m)

Bulgaria25%

Serbia24%Kosovo

19%

Macedonia11%

Romania9%

Albania6%

Bosnia6%

Segment South Eastern Europe


Key financial dataRegional loan portfolio split

Loan portfolio growth(1)

Total: EUR 2,535m (70% of total)

+3.2%

(in EUR m) FY 2015 FY 2016

Net interest income 174.6 150.5

Provision expenses 19.1 8.0

Net fee and commission income 33.8 28.7

Net result of other operating income -6.1 1.5

Operating income 183.2 172.7

Operating expenses 121.9 111.1

Operating result 61.3 61.6

Tax expenses 8.1 7.3

Profit of the period 53.2 54.4

Growth in loan portfolio > EUR 30k 16.6% 12.5%

Customer deposits / gross loan portfolio 97.4% 96.9%

Net interest margin 5.3% 4.3%

Cost income ratio 60.3% 61.5%

PAR 30 ratio 4.4% 3.8%

Coverage ratio PAR 30 100.3% 105.6%

RoAE 12.8% 12.3%

Notes: (1) By initial loan size

18% 8%

82% 92%

676 705

Dec-15 Dec-16


(inE

UR

m)

Georgia44%

Ukraine42%

Moldova14%

Segment Eastern Europe


Total: EUR 707m (20% of total)

+4.3%



(in EUR m) FY 2015 FY 2016


Provision expenses 18.7 12.7

Net fee and commission income 9.4 8.8

Net result of other operating income 7.1 4.4



Operating result 20.2 25.9


Profit of the period 17.1 21.4





PAR 30 ratio 5.3% 3.3%


RoAE 16.1% 17.5%Notes: (1) By initial loan size

45% 34%

55%66%

321 303

Dec-15 Dec-16


(inE

UR

m)

Ecuador86%

Colombia11%

Mexico3%

(5.7)%

Segment South America


Total: EUR 307m (8% of total)



(in EUR m) FY 2015 FY 2016


Provision expenses 4.1 -2.0

Net fee and commission income 0.5 -0.2

Net result of other operating income 3.9 2.0



Operating result 1.1 -1.1


Profit of the period -0.3 -2.3





PAR 30 ratio 8.4% 7.5%


RoAE -0.5% -3.5%Notes: Includes Mexico; (1) By initial loan size

74.8%

10.7%

6.8%3.1% 3.7% 0.8%

Customer deposits

Liabilities to IFIs

Liabilities to banks

Debt securities

Subordinated debt

Other liabilities

Funding and rating update


Funding sources overview

Self funding ratio development

► Highly diversified funding structure andcounterparties

► Customer deposits main funding source, accounting for 75% as of 31-Dec-16

► Supplemented by long term funding from IFIs and institutional investors

► High and stable self-funding ratio of 96%

Rating:

► ProCredit Holding: BBB (stable) by Fitch

► ProCredit Banks: At or close to sovereignIDR; Local banks in Macedonia andGeorgia are even rated above thesovereign IDR

Total liabilities(1): EUR 4.6bn

92% 96%

Dec-15 Dec-16

Customer deposits / loans ratio

Notes: (1) Total liabilities excluding liabilities related to assets held for sale (EUR 368m as of 31-Dec-16)

Continued focus on transparent reporting ► Advanced disclosure including e.g.

► Annual Environmental Performance Report 2016 (to be published May-17)► Group Environmental Management Policy ► Further documents on the group’s approach to managing environmental and social risks in lending

Significantly reduced ecological footprint► Yearly absolute energy consumption down by 11.4% yoy► Yearly absolute greenhouse gas emissions down by 13.5% yoy► Energy consumption per floor area kWh/m2 down by 2.3% yoy► Paper use down by 30.9% yoy; paper use per employee kg/pp down by 15.9% yoy

External certification► ISO 14001 certification completed for most of the ProCredit banks► EU Eco-Management and Audit Scheme (EMAS) certification for ProCredit‘s

Germany-based institutions in addition to ISO 14001► Corporate Responsibility Prime rating by oekom research

Sustainability update


Continued focus on employee training► ~49,900 man-days of trainings(1)

► 527 graduates and participants from the Management and Banker Academy► ~3,540 man-days of environmentally related trainings(2)

Note: (1) Entry Programme, Group Workshops, Management Academy, Banker Academy, English course (2) Local trainings at 12 banks, academy environmental blocks, workshops, Entry Programme environmental block

(in EUR m) Dec-15 Dec-16Assets

Cash and cash equivalents 834 937Loans and advances to banks 339 287Financial assets at fair value through profit and loss 1 0Available-for-sale financial assets 207 250Loans and advances to customers 4,105 3,629Allowance for losses on loans and advances to customers (177) (151)Property, plant and equipment 172 157Other assets 99 97Assets held for sale 429 461Total assets 6,009 5,668

LiabilitiesLiabilities to banks 394 318Financial liabilities at fair value through profit or loss 2 1Liabilities to customers 3,793 3,475Liabilities to International Financial Institutions 509 499Debt securities 205 144Other liabilities 27 19Provisions 18 16Current tax liabilities 2 1Deferred tax liabilities 4 2Subordinated debt 131 171Liabilities related to assets held for sale 319 368Total liabilities 5,405 5,014

EquitySubscribed capital 254 268Capital reserve 97 115Legal reserve 0 0Retained earnings 284 325Translation reserve (44) (62)Revaluation reserve from available-for-sale financial instruments 5 0Equity attributable to equity holders of the parent company 596 646Non-controlling interests 8 8Total equity 604 654Total equity and liabilities 6,009 5,668

Balance sheet


Income statement – quarterly overview


(in EUR m) Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016Interest and similar income 85.1 82.8 81.1 78.6 327.6Interest and similar expenses 24.4 24.6 24.4 23.3 96.8Net interest income 60.7 58.2 56.7 55.3 230.8

Allowance for losses on loans and advances to customers 9.4 4.5 2.9 1.8 18.6Net interest income after allowances 51.3 53.7 53.8 53.5 212.2

Fee and commission income 14.2 14.7 14.5 14.8 58.2Fee and commission expenses 3.5 3.8 4.0 3.9 15.2Net fee and commission income 10.7 10.9 10.4 10.9 43.0

Result from foreign exchange transactions 2.0 2.6 3.3 1.0 8.9Net result from financial instruments at fair value through profit or loss (0.4) (0.1) (0.3) (0.3) (1.0)Net result from available-for-sale financial assets 0.3 4.0 0.2 (0.0) 4.6Net other operating income (2.7) (6.7) (0.8) 1.9 (8.3)Operating income 61.2 64.5 66.7 67.0 259.3

Personnel expenses 21.8 22.1 22.1 22.1 88.2Administrative expenses 25.4 27.1 25.8 31.7 110.1Operating expenses 47.3 49.2 48.0 53.8 198.2

Profit before tax 13.9 15.2 18.7 13.2 61.1

Income tax expenses 3.9 3.4 3.9 2.9 14.1Profit of the period from continuing operations 10.0 11.8 14.9 10.4 47.0

Profit of the period from discontinued operations 1.1 6.5 (8.6) 15.1 14.0 Profit of the period 11.0 18.3 6.2 25.5 61.0

Profit attributable to equity holders of the parent company 10.6 18.0 5.8 25.1 59.4Profit attributable to non-controlling interests 0.5 0.3 0.4 0.4 1.6

Income statement by segment

40ProCredit Group | FY 2016 results | Frankfurt am Main, 29th March 2017Note: Banco Pyme Los Andes ProCredit Bolivia, Banco ProCredit El Salvador, ProConfianza Mexico, and Banco ProCredit Nicaragua shown as discontinued operations

FY 2016 (in EUR m) Germany Eastern Europe South Eastern Europe South America Consolidation Group

Interest and similar income 20.5 108.0 177.5 39.1 (17.5) 327.6of which inter-segment 17.3 0.1 0.0 0.0

Interest and similar expenses 21.9 48.2 27.0 15.3 (15.6) 96.8of which inter-segment 0.2 4.7 7.3 3.5

Net interest income (1.4) 59.7 150.5 23.8 (1.8) 230.8

Allowance for losses on loans and advances to customers (0.1) 12.7 8.0 (2.0) 0.0 18.6Net interest income after allowances (1.3) 47.0 142.4 25.8 (1.8) 212.2

Fee and commission income 9.1 12.6 43.8 1.9 (9.2) 58.2of which inter-segment 7.8 0.0 1.4 0.0

Fee and commission expenses 2.6 3.9 15.1 2.0 (8.3) 15.2of which inter-segment 0.8 1.3 5.3 0.9

Net fee and commission income 6.5 8.8 28.7 (0.2) (0.9) 43.0

Result from foreign exchange transactions (2.0) 4.6 7.0 (0.1) (0.6) 8.9Net result from financial instruments at fair value through profit or loss (1.4) (0.1) 0.5 0.1 0.0 (1.0)Net result from available-for-sale financial assets (0.3) 0.3 4.2 0.3 (0.0) 4.6

of which inter-segment 0.0Net other operating income 94.7 (0.4) (10.2) 1.8 (94.2) (8.3)

of which inter-segment 89.6 0.0 2.0 2.6Operating income 96.4 60.1 172.7 27.7 (97.6) 259.3

Personnel expenses 21.6 12.5 44.0 10.1 0.0 88.2Administrative expenses 29.7 21.7 67.1 18.7 (27.1) 110.1

of which inter-segment 5.6 4.6 12.3 4.7Operating expenses 51.2 34.3 111.1 28.8 (27.1) 198.2

Profit before tax 45.1 25.9 61.6 (1.1) (70.4) 61.1

Income tax expenses 1.2 4.5 7.3 1.2 0.0 14.1Profit of the period from continuing operations 44.0 21.4 54.4 (2.3) (70.4) 47.0Profit of the period from discontinued operations 14.0Profit of the period 44.0 21.4 54.4 (2.3) (70.4) 61.0Profit attributable to equity holders of the parent company 59.4Profit attributable to non-controlling interests 1.6

41

Ukraine

“Hausbank” for SMEs serving their typical banking needs

► SMEs with formalised structures and sustainable business models

► Focus on agriculture and manufacturing

► Yearly revenues between EUR 50k to over EUR 2,000k

Access to full range of relevant banking services

Valuable in countries with high level of informality and lack of transparency

Trustful long-term relationships

► Vegetable cultivation (300 ha, 31 FTEs)

► Long-term relationship

► Regular financing of working capital and fixed assets

Loan volume PCBTotal financing since

2011 Outstanding loan

amountEUR 864k EUR 549k

Utilisation of PCB services• Current account (EUR, RSD)• Domestic and International payments • e-Banking

Revenue Account turnoverEUR 70k (monthly) EUR 103k (monthly)

Credit limitshort-term long-term total limitEUR 150k EUR 600k EUR 750k

Products

► Full range of business loans (loan size range typically EUR 30k to EUR 3m)

► Deposits

► E-banking

► Card services

► Liquidity management

► Payroll services

► Documentary business

► Personal banking services

Supplementary financial services

Understanding of clients’ financial needs and risks

Additional stable revenues

Customer deposits Most recent project: Solar panels to power irrigation of agricultural land

Comprehensive service as “Hausbank”

Customers Value-added

Target customers with high potential: SMEs Significant benefits for clients…

Typical SME client (Serbia)

Simple loan and deposit products

…and for ProCredit


Continuous training in centralised academy is thecornerstone of ProCredit‘s corporate culture

42

► Mandatory for all new recruits► Six-month programme before final hiring► Dual education through hands-on job training and courses► 2/3 of participants usually receive a final employment offer(1)

► Systematic, intensive on-the-job training ► Seminars and training units with specialist topics► Salary linked to training level► “Up-or-out” in the first two years, with long-term prospects thereafter

► ProCredit Management Academy: − Training of middle management as well as future senior management− Catalyst of the closely-knit management network

► ProCredit Banker Academy:− Training of middle management

ProCredit Entry Programme

Continuous training

International management development

Note: (1) In relation to participants of six-month ProCredit Entry Programme


Comprehensive “Hausbank” service benefitting ProCredit’s SME clients (I/II)

43

Al Sistem doo and ProCredit Bank Serbia

► Al Sistem has been a client of ProCredit Bank since 2007

► The company produces and installs aluminium and PVC constructions in residential, business and industrial buildings

► The company operates in Serbia, with significant share of its products being exported

► To finance supplies for new business opportunities abroad, Al Sistemrequested a EUR 250,000 loan from ProCredit Bank Serbia

► In addition, the client works with ProCredit for international payments, e-banking and via usage of a visa business card. He also uses a credit limit given by ProCredit, which allows for greater operating and financial flexibility

► The company currently employs 55 people

► Given the investment based on the loan from ProCredit, Al Sistemcurrently plans to train 10 high school graduates who will then be eligible for permanent employment


Comprehensive “Hausbank” service benefitting ProCredit’s SME clients (II/II)

44

Aliana OOD and ProCredit Bank Bulgaria

► Aliana OOD is a leading textile manufacturer led by Vassil and RositsaZahariev

► Founded in 1993, the company today is a top producer of silicone polyester wadding and silicone down

► The company currently has 160 employees and exports a large share of its products to the EU

► In 2013, ProCredit Bank Bulgaria began working with the client. Since then, they have expanded significantly and have invested in several energy efficiency projects. To date, total borrowing from ProCreditBank Bulgaria amounts to EUR 2,250,000

► One part of their energy investment plan was to insulate their production facilities and to replace energy-intensive drying equipment for batting with more efficient models

► The investments have resulted in lower production prices, as well as new customers. In addition, turnover increased by approximately 20% in 2014

► Aliana OOD uses several ProCredit services, such as bank cards, e-banking and payroll services, alongside regular visits of the new 24/7 zones


Long-standing and well interconnectedmanagement teams at group and local level

45

Years of experience within ProCredit; Seat at supervisory board of local bank; Notes: (1) Including experience with Internationale Projekt Consult GmbH, now Zeitinger Invest; (2) Not including ProCredit Bank Germany; (3) Overall average of all local ProCredit banks

Experienced management collaborating at Holding and local level

21 management board members(15 female/ 6 male)

Segment South Eastern Europe


Segment South America


Segment Eastern Europe

► Central training in Fürth

► English as lingua franca (> 50 courses p.a.)

► Regular specialist events and regional meetings

Collective training…

► Strict common operating standards and policy guidelines

► Strong, standardised MIS reporting

► Holding management with supervisory board seats at local banks involved in strategic business processes

…supported by clear framework

► Common set of values

► Closely-knit network

► Rapid diffusion of best practices

…as catalyst for a shared vision and teamwork…

ProCredit Holding as of 1 April 2017

Local ProCredit banks(2)

12(3) 12(3) 12(3)


Borislav Kostadinov

15► Credit risk management► Environmental

management► Group communications ► Investor relations

Dr. Anja Lepp

31(1)

► Risk control► Financial risk► Operational risk► AML

Dr. Gabriel Schor

33(1)

► Finance and controlling► Group supervision► Treasury and funding

Sandrine Massiani

9► Human resources► IT► Business support► Compliance & legal► Internal audit

Business client advisers (BCAs) with key focuson clients and risk

► Comprehensive internal BCA training fosters high staff qualification

► Clients receive individual attention from specialised BCAs who

− Truly understand the client, its situation and (risk) profile

− Diligently assess the legitimacy of their clients’ income and avoid over-indebting them

− Provide advice on the entire range of banking services

► BCAs thus act as key drivers of low default risk and key facilitators of mutually beneficial client relations

► Clear positioning as high quality advisory service allows build up of clients’ trust as base for successful and long-term relationships

46

High loan quality based on trustful long-termrelationships and prudent risk management

Kitchen and office furniture Serbia

AgricultureRomania

Photovoltaic equipment producer

Moldova

Soap producer Ukraine

Selected SME clients

Construction materials producer -

Georgia

► True client centricity instead of bonus-driven “sales personnel”

► BCAs as “first line of defence” for managing risk

Medicinal and aromatic herbs

Albania

Textile manufacturing

Bulgaria

► Bedegi, founded in 1999, chose the ProCredit Bank in Georgia in 2003 to take out its first loan to enlarge its site

► In the 13 years since then, the client has used a wide range of banking services tailored to its different stages of development

► “I always feel that ProCredit Bank is there to support me.”

Koba Liparteliani, Founder Bedegi Ltd.


The development-oriented approach as the foundation of ProCredit‘s strong reputation

47

ProCredit has an ethical corporate mission…

► Long-term mission lock supported by organisational set-up as KGaA(Kommanditgesellschaft auf Aktien) and reputable shareholder base

► Ideal blend of entrepreneurial spirit and catalytic public support

…and reflected in how ProCredit does business

Fostering entrepreneurs and SMEs

► Focus on SMEs as drivers of economic growth and employment in emerging countries

► Strong leverage in terms of job generation and prosperity

Environmental responsibility

► State-of-the-art standards for environmental impact of ProCredit’slending operations

► Focus on promotion of “green” investments

► Strict exclusion lists

…backed by a mix of development-oriented and government-backed core shareholders…

► Development also means− Fostering democracy and free speech − Respect for fellow human beings− Social justice− Ecological awareness and ethical behaviour

► Aiming for a sustainable contribution to economic, social and environmental development

► Education and empowerment of employees► Corporate responsibility also accredited by external parties: Social responsibility

► No focus on consumer lending

► No complex products

► Promotion of price and banking sector transparency

► Rigorous approach regarding AML and informal clients

Notes: (1) Only includes ProCredit Staff Invest 1 GmbH & Co. KG and ProCredit Staff Invest 2 GmbH & Co. KG

(1)


► “Bankers who don’t conform to the banker stereotype”:

− Values-based approach and critical political awareness

− Social and intellectual competence

− Not reducing “success” to monetary amounts

The corporate culture is the base of a unique approach to employee selection

48

ProCredit’s corporate mission is the foundation of its business ethics…

…with a multistage and highly selective approach to hiring employees…

► Very attractive employer

► Build up of knowledge within the organisation

► Strong discussion culture with flat hierarchies

…committing employees to a unique corporate culture

First selection phase

Assessment day

2-week focus session

► Transparent, standardised salary system

► No performance-based bonus payments

► Market-oriented salaries

► Cap of senior management pay

► Managers and staff as shareholders (5.2% of shares outstanding as of 21 December 2016)

► Unique approach compared to the norm in ProCredit’skey markets, where “who you know” often counts more than what your potential is

► Only c.2% of applicants receive an offer(1)

6-month entry programme

Note: (1) Relating to applicants of the first selection phase versus admissions to the 6-month entry programme, excluding direct hires


Contact Investor Relations


Investor relationsProCredit Holding AG & Co. KGaANadine Frerot

tel.: +49 69 951 437 285e-mail: [email protected]

Financial calendar

Date Place Event information

15./16.02.2017 Frankfurt/ Main Oddo Seydler 11th German Conference

21./22.03.2017 The Hague Impact Summit Europe

29.03.2017 Frankfurt/ Main Results Press Conference, Annual Report 2016, Analyst Conference Call

09.05.2017 Frankfurt/ Main DVFA 8th DVFA Spring Conference

15.05.2017 Quarterly Statement as of 31-Mar-17, Analyst Conference Call

17.05.2017 Frankfurt/ Main Annual General Meeting

19.05.2017 Frankfurt/ Main ESN 33rd European Conference

22/23.06.2017 Venice Berenberg Pan-European Discovery Conference

14.08.2017 Interim Report as of 30-Jun-17,Analyst Conference Call

14.11.2017 Quarterly Statement as of 30-Sep-17, Analyst Conference Call

Contact details

Media relationsProCredit Holding AG & Co. KGaAAndrea Kaufmann

tel.: +49 69 951 437 138e-mail: [email protected]

Update as of 03.05.2017

50ProCredit Holding | March 2017

Slide 19:

− PAR 30 was adjusted to 4.4% as disclosed in the Annual Report 2016.

Slide 21:

− In the graph “Overview of growth in the last three years”, the split between business clients and private clients, and in the graph “Structure of green loan portfolio”, the distribution within the categories has been adjusted.

slide 31 and slide 39:

− In Q1 2016 and Q2 2016, gains or losses from the sale of institutions are presented in restated positions. Overall profit of the period was unaffected. For more details, please see consolidated financial statement 2016, note 6).

Slide 45:

− The order of the members of the management is now alphabetical.

New slide 50:

− Changes as of the update from 03.05.2017.

Disclaimer

The material in this presentation and further supporting documents have been prepared by ProCredit Holding AG & Co. KGaA, Frankfurt am Main, Federal Republic of Germany (“ProCredit Holding”) and are general background information about the ProCredit group’s activities current as at the date of this presentation. This information is given in summary form and does not purport to be complete. Information in this presentation and further supporting documents, including forecast financial information, should not be considered as advice or arecommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk.

This presentation and further supporting documents may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to the ProCredit group’s businesses and operations, market conditions, results of operation and financial condition, capital adequacy, specific provisions and risk management practices. Readers are cautioned not to place undue reliance on these forward looking statements. ProCredit Holding does not undertake any obligation to publicly release the result of any revisions to these forward looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside ProCredit Holding’s control. Past performance is not a reliable indication of future performance.


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